Crypto Community Breaths a Sigh of Relief as SEC Withdraws Controversial Guidance
The U.S. SEC has retracted its previously contentious crypto accounting guideline, SAB 121, marking a potential turning point for the crypto sector under Trump's administration.
Crypto Community Breaths a Sigh of Relief as SEC Withdraws Controversial Guidance
The U.S. Securities and Exchange Commission (SEC) officially revoked its controversial crypto accounting guidance, which previously required financial institutions to categorize cryptocurrencies as liabilities on their balance sheets.
In a statement released on January 23, 2025, the SEC addressed the passing of Staff Accounting Bulletin (SAB) 122, which effectively nullified the earlier guidance under SAB 121. This decision is viewed as a significant win for the cryptocurrency sector, especially under the new leadership of acting Chair Mark Uyeda, who appears to advocate for a more balanced approach toward crypto regulation compared to former SEC Chair Gary Gensler.
Previously, SAB 121 mandated that financial institutions list customer crypto assets as liabilities, provoking backlash from both lawmakers and the crypto community. Efforts to repeal SAB 121 initially faced challenges, including a presidential veto from Joe Biden, who supported the necessity of the previous guidance citing accounting principles. However, this stance was overturned after Donald Trump assumed the presidency, acting promptly on his campaign promises to bolster the crypto industry.
During Trump’s administration, he signed an executive order aimed at establishing a comprehensive regulatory framework for digital assets, indicating a pivot towards more favorable conditions for cryptocurrencies in the U.S. market.
Key Developments
- Mark Uyeda’s leadership signals a friendlier SEC stance towards cryptocurrency.
- Trump has prohibited Central Bank Digital Currencies (CBDCs) supporting Bitcoin and open blockchain innovation.
- Regulatory changes under the new administration may provide a more vibrant market for digital assets.
This latest revocation of SAB 121 is a pivotal moment for the crypto industry, as it clears one of the major burdens previously placed on banks and other financial institutions regarding the treatment of digital currencies.
